Blue-chip stocks galloped to their highest plateau since the Gray Monday "market event," but smaller and high-tech stocks weren't invited along for the ride.
Dow Jones Industrial Average
gained 73.92 to 7724.74, its highest finish since the Oct. 24 close of 7715.41 that preceded Oct. 27's 554.26-point plunge.
led the way. The broad
similarly hopped 6.36 to 944.59, closing above Oct. 24's 941.64 for the third time since the crashesque thing.
So does this look like the solid, all-together-now rally Wall Streeters have been salivating for? "Not on a breadth basis it doesn't," said Dan Baker, vice president of equity trading at
in Tigard, Ore. "It's even. It's nothing all that exciting."
Market internals were mixed at best, with
New York Stock Exchange
advancers shoving past decliners by 1,526 to 1,388 on a moderate 552.6 million shares. New Big Board highs led new lows by 87 to 51. On the
Nasdaq Stock Market
, 2,381 decliners beat 2,038 advancers on 563.6 million shares as the tech-stuffed
Nasdaq Composite Index
edged up 0.78 to 1601.22. New Nasdaq lows topped new highs by 121 to 108.
Major tech indices posted slight declines, with the
Philadelphia Stock Exchange Semiconductor Index
down 1.73 to 296.41 and the
Morgan Stanley High-Tech 35
down 0.70 to 450.72. Small-caps also trailed the big shots as the
slid 1.44 to 430.69.
The big-cap stock market and the fixed-income side today moved in true tandem for a change. The benchmark 30-year Treasury bond surged 13/32 to 101 8/32 in price, its yield easing to 6.04%. The bond market rally came despite unexpectedly strong October
, which rose to 1.53 million instead of falling to 1.47 million.
"It looks to me like it's an overwhelming flight to quality," said Hugh Johnson, chief investment officer at
. "You see it in the bond market and you see it in the stock market as well. It's not reassuring to see it, because it has as much of a bad-news message as a good-news message."
The good news in higher stock prices and lower bond yields is fairly obvious, but Johnson said the bad news is that the boost comes from overseas investors fleeing their shaky markets and flooding into the safer U.S. Long-term, the U.S. and the world at large need Southeast Asian markets to recover domestically instead of sending their investors' money to pump up the U.S. markets, Johnson said.
Also worrisome is the worsening difficulty of finding valuation bargains in the stock market, he said. "I was having dinner with one of our portfolio managers last night, and he said, 'You know, Hugh, there's no low-hanging fruit,' " Johnson said. "We've been culling through the list looking for stocks to buy, and we can't find any that fit our value criteria. It really creates a problem."
Wednesday's market action
(earnings estimates from
gave up 15/16 to 78 1/16 after agreeing to be acquired by
in a $16 billion stock swap, but it definitely won today's euphemism derby. CoreStates CEO Terrence Larsen, at a press conference, refused to specify how many jobs would be cut after the merger but said the expected "disruption" would be "significantly above" the 3,000 new jobs the deal will bring to the Philadelphia area. A new term thus enters the business lexicon. Imagine: "HugeCo to Disrupt 10,000 Workers in Cost-Cut Plan." In fairness, CoreStates does expect to find jobs inside the merged behemoth for some of the disrupted. As for the other party in the CoreStates deal, First Union slipped 3/4 to 49 1/2.
Brown Brothers Harriman
downgraded First Union to near-term hold from buy and to long-term market performer from outperform.
ascended 1 1/16 to 67 1/4 after agreeing to buy London-listed
Mercury Asset Management
for 3.1 billion pounds, or about $5.2 billion. The deal creates the world's third-largest active asset management group, with $450 billion under management.
upped Merrill to buy from accumulate.
skyrocketed 15 7/16, or 30%, to an all-time high of 66 15/16 after
agreed to buy the company for $68 per share in cash, or $480 million. HFS inched up 1/4 to 68 1/16.
, which is in the process of merging with HFS, trickled down 1/16 to 28 1/4.
surged 4 1/2, or 29.6%, to 19 3/4 after
agreed to acquire the company for $20 per share in cash, or $395 million. Texas declined 5/8 to 98.
Total Renal Care
slumped 3 5/16 to 27 13/16 after announcing it plans to acquire rival
Renal Treatment Centers
in a $1.3 billion stock swap. Renal Treatment lost 2 1/4 to 36. Merrill Lynch lowered Total Renal to near-term neutral from accumulate, maintaining a long-term buy.
plummeted 4 3/8, or 21.2%, to 16 1/4 after reporting third-quarter earnings of 33 cents per share. That fell 3 cents short of the two-analyst consensus estimate but beat the year-ago 22 cents.
jumped 2 1/8, or 18.7%, to 13 9/16 after Merrill Lynch upgraded it to near-term neutral from accumulate. The firm kept a long-term buy rating on the stock.
Helen of Troy
tumbled 2 9/16, or 17.7%, to 11 15/16 after saying it expects to report third-quarter earnings of 31 cents to 33 cents per share. That would miss the three-analyst estimate by 3 cents but would top the year-ago 28 cents. The company said it expects production to catch up with orders in the fourth quarter, leading to record results for the fiscal year ending February.
traded as high as 49 7/8 after announcing it plans to
200 to 300 jobs at its
Dow Jones Markets
unit, but it slid back for a loss of 11/16 to 47 7/16. The publisher said it plans to reduce its planned $650 million investment in the former
, plowing $170 million into it this year and less in 1998. Dow Jones will take a "large" fourth-quarter charge for severance and writedowns of goodwill, but it still expects to earn $1.20 to $1.40 per share in 1998. The 10-analyst outlook calls for $1.39. How long has long-suffering Dow Jones been suffering? From Sept. 30, 1987, through yesterday, its stock was up 3% versus an S&P 500 upswing of 192%. But gold was down 34% over the period, so Dow Jones stock is not just as good as gold, it's better.
Speaking of gold,
fell 13/16 to 30 1/2 and affiliate
fell 1 3/8 to 31 1/8 after the companies cut their quarterly dividends to 3 cents per share from 12 cents to save cash as gold prices drop. Gold today lost $2.60 to $305.00.
Oil drillers and oil-service stocks were drubbed on what some analysts characterized as year-end profit-taking.
Friede Goldman International
lost 6, or 15.5%, to 32 11/16,
lost 4 3/8, or 12.7%, to 30,
lost 4 9/16 to 63,
lost 5 15/16 to 102 1/16,
lost 2 7/8 to 49 1/8,
lost 1 3/8 to 53 5/8 and
lost 1 3/8 to 82 1/4.
, which late
yesterday issued a positive earnings outlook, nevertheless shed 1 5/8 to 38 7/16.
looked at the case for a driller bounce-back in a
story today, and columnist James Cramer wrote late
yesterday that he retains confidence in the group's fundamentals.
sloughed off 1 1/2 to a 52-week low of 22 13/16 after late
yesterday saying it expects to report only a "marginally profitable" second quarter. Several firms made negative moves on the stock and other disk-drive makers. Elsewhere in the industry,
lost 1 3/8, or 9.2%, to 13 9/16,
lost 1 9/16 to 26 1/8,
lost 9/16 to 19 1/2 and
lost 1/8 to 21 7/8.
moved up 2 1/16 to an all-time high of 38 13/16 on news that a group of investors has submitted a takeover proposal. Terms weren't disclosed.
slipped 3/16 to 43 13/16, even though Merrill Lynch named it focus stock of the week.
gained 5/8 to 20 after announcing a buyback of up to 1.5 million shares and naming board member Robert Kessler to the vacant position of chairman.
ZEN ADR) fell 1 3/8 to 89 3/8 after
cut it to reduce from hold.